A case study on “The sandwich strategy:”
Federal Express (FedEx) created an overnight delivery service toto compete with the United States Postal Service (USPS). Responding to FedEx’s entry and early success, USPS created a product called Express Mail priced at $8.95, as compared to FedEx’s $12.
FedEx, had it been like most companies, would have reduced price and gone to war with the USPS. But, price is not just a number. It is a way of signaling value and FedEx understood that. So, they responded by redefining their market.